Updated: Bollywood Standoff Ends After Rs300 Crore Of Losses

imageAfter 14-hour-long negotiations that ended this morning at 2:30am, Bollywood producers and multiplex owners have reached an agreement on the contentious revenue sharing formulae, ending a crippling two-month long standoff that saw the film industry suffering a combined loss of Rs300 crore and left viewers with no cinematic relief this summer. Big banner films such as Yash Raj Films’ New York and Sajid Nadiadwala’s Kambakkht Ishq and Big Pictures’ Kal Kisne Dekha will shortly hit the screens.

The end of the standoff will mean that the first week will see a revenue sharing of 50:50 between producers and multiplexes for all films. Producers can also now decide the release plan of their films. Earlier, if a multiplex was to show a film, the producer had to release the film in all the centres of a multiplex chain. In subsequent weeks, revenue will be shared as per the following ratio: 42:58, 35:65 and 30:70 (producers: multiplexes), said Mukesh Bhatt, chairman of United Film Producers and Distributors Association. He said the losses due to the two-month-long impasse was estimated to be Rs300 crore.

“We are delighted that we have been able to reach a resolution to the issue. We have decided to now stand together and fight the menace of piracy, which is resulting is a loss of crores of rupees to the industry and the government,” Bhatt told contentSutra. Bhatt’s Jashn will release on 10 July, he said.

Amit Khanna, chairman, Reliance Big Entertainment, clarified some related clauses underpinning the broad agreement. “If a film grosses more than 17.5% in the first week, there is a 2.5% upside in the sharing formulae in favour of the producers for the first three weeks. Similarly, if a film grosses less than Rs10 crore in the first week, there will be a 2.5% upside in favour of the multiplexes in the first three weeks.” Is essence, when a film performs well, producers are rewarded and when it doesn’t perform very well, exhibitors are compensated.

He also clarified that while producers are free to decide on the number of screens and which multiplexes they want to release in, multiplexes will get to decide the number of shows and which shows a film is allocated. Also, the Multiplex Association will have a say in 5% of the total number of screens a film is released in. For instance, if a film is released in 100 screens, the multiplex association can allocate five screens to any multiplex as per their discretion. This is to avoid the victimization of any multiplex by the producers, Khanna said. This is not applicable for films releasing in more than 500 screens, because all multiplexes would have been covered in such cases.

The two sides are expected to make an announcement on Monday with further details.

Photo Credit: Flickr/RajMan